Hyundai has offered a close look at and test drives of the refreshed 2018 model-year Sonata and all-new Elantra GT for the US market. Both vehicles face tough competition as US car sales continue to decline.
IHS Markit perspective
- Significance: Hyundai has provided a look at the US market mid-cycle update of the Sonata mid-size sedan and the all-new Elantra GT hatchback at a recent event. As sales of passenger cars have struggled in the United States, these updates from a brand seeing notable sales declines in a difficult market need to connect with buyers.
- Implications: The Sonata's update focuses on exterior improvements, after the latest generation of the model was considered too evolutionary. The Elantra GT is new, but related to the European i30 despite wearing the Elantra name in the US.
- Outlook: Hyundai has had a difficult 2017 with sales down 10% in the year to date, and its car lines suffering at the same time as the industry has. The Sonata's facelift will have a difficult time maintaining sales against the all-new Toyota Camry and the Honda Accord, as holding ground is an increasingly difficult challenge in a difficult sedan market. The Elantra GT offers an opportunity to take advantage of increasing US acceptance of hatchbacks, and is a competitive alternative to the refreshed Honda Civic and Chevrolet Cruze hatchbacks.
Hyundai revealed a mid-cycle update for the Sonata sedan at the New York Auto Show in April 2017 and the all-new Elantra GT at the Chicago Auto Show in February. Following these product reveals, Hyundai recently invited the media and industry analysts, including IHS Markit, to take a closer look and offered a test drive of the vehicles.
2018 Sonata: More technology and a much-improved look
The latest Hyundai Sonata, the ninth generation of the model in the US and the tenth globally, was introduced for the 2015 model year. For the 2018 model year, Hyundai's changes are a mid-cycle facelift. The mid-cycle update focuses on improving the exterior, raising the level of technology, and adjusting the content and trim levels to better serve the market. The interior's minor updates include revisions giving a cleaner look to the centre stack, instrument dials, and steering wheel.
The model's technology updates includes wireless device charging and a rear USB charge port, as well as standard Apple CarPlay and Android Auto (these two features were expected with prior Sonatas, but their introduction was delayed). Hyundai has made blind-spot detection standard, based on consumer feedback and, according to Hyundai Motor America product planner John Shon, third-party research. Lane-keep assist has been upgraded with driver attention alert, and intelligent LED headlights are available. Hyundai has also created a hidden trunk release button. It is impossible to spot but very easy to use, and contributes to a cleaner look.
Powertrain changes to the 2018 Sonata are minor ones. The 1.6-litre, 2.0-litre, and 2.4-litre 4-cylinder engines have been carried over, but the 2.0-litre takes an 8-speed automatic transmission. This is the Hyundai-developed 8-speed transmission first introduced in the 2017 Genesis sedans; however, Hyundai says it has given the first front-drive application (implying more will come) in the Sonata. The Sonata plug-in hybrid and hybrid will be revived in early 2018, with specifications not yet revealed.
Shon announced more competitive pricing structure and trim levels. In addition, Hyundai has increased the visual differentiation between the Sport and other variants. The Sport 2.4L now has exterior and interior differentiation that was previously exclusive to the Sport 2.0T models. The enhancements include a Sport grille, front fascia, rear diffuser, chrome rocker panel, and dual exhaust. Inside, there is a flat-bottom steering wheel with paddle shifters. Minor ride and handling updates to the 2018 Sonata include increasing the steering gearbox torsion bar stiffness and rear trailing arm thickness, and changing bushings from steel insert to aluminium.
The new trim level strategy results in a Sonata line-up with nine variant offerings and a revised pricing structure. With the previous-generation car, Sonata offered a great deal at the low end, with plenty of content to provide value, and then options for a more expensive car relatively quickly. The revised structure does not reduce the entry-point price and yet pulls down the pricing for the top trim levels. There is more standard equipment across the board, as well as a lower price for the Limited 2.0T and the Limited Ultimate. The pricing of each has been reduced USD2,000 to USD30,300 (Ultimate) and USD32,450 (2.0T). The standard SE has a price increase of USD100, to USD22,050, while the Eco (with the 1.6-litre engine) and SEL versions are slightly less expensive. Hyundai has also added an SEL 2.4 Tech 2.4 version and revised the SEL equipment. These two are expected to be the model's sales volume leaders. Hyundai has increased the price of the Sport, whether with a 2.4-litre engine or 2.0-litre turbo. These models will have a lower take rate, but more engagement and there is the opportunity to command a premium for the 'sport' content. Hyundai's BlueLink connected services (including smartphone, Alexa and watch wearable functions) are now standard for three years. Hyundai has also dropped the panoramic sunroof in favour of a standard size unit. When pressed, Shon said that buyers simply did not see the value and the take rate was low.
With all the minor equipment changes, the Sonata's most important updates are to the exterior. Compared with the 2015‒17 model years of the Sonata, the hood and decklid, front and rear fascias, and front fenders have been updated. The exterior updates give the Sonata the new Hyundai cascading grille shape and LED lighting, with changes to the rear taillights and decklid designed to accentuate the vehicle's width. The previous-generation Sonata, introduced for the 2011 model year, took the market by storm from a design perspective and significantly improved Hyundai's image and sales. The 2015 model-year Sonata was considered handsome but too evolutionary. The new face of the 2018 Sonata looks more modern and clean.
2018 Elantra GT: A hatchback update for the US
The 2018 Elantra GT is based on the European i30, also recently introduced in Europe. The Elantra GT for the US market is sourced from Hyundai's plant in Ulsan, South Korea, however. The European i30 is offered in a broader product line-up, including an N version and the upcoming i30 Fastback. In the US, the GT carries the Elantra name to save on marketing costs, as well as improving the Elantra's overall image in the country, skips the N version, and is only offered as a hatchback. The GT joins the Elantra, Elantra Eco, and Elantra Sport sedans launched for the 2017 model year. Hyundai is looking to the Elantra GT to grab buyers who do not want a sport utility vehicle (SUV) and are not satisfied with the utility the sedan provides. The small compact hatchback segment is becoming increasingly crowded with other models joining, including new Chevrolet Cruze and Honda Civic hatchbacks.
According to Mike Evanoff, US planning manager for Elantra and Veloster, generally compact hatchback buyers are male, younger, more educated, and claim more physical and outdoor activities than buyers in the compact car, entry crossover utility vehicle (CUV) and subcompact CUV segments (as defined by Hyundai). They also cite fun-to-drive as a most important reason for making a purchase nearly three times as often as a compact car buyer or entry CUV buyer. As a result, this second US offering of the GT is again in GT and GT Sport versions, expanding consumer options. The Sport has up-level features including black leather interior with red accents throughout, as well as 18-inch wheels. All versions of the GT are well equipped, with standard vertical LED daytime running lights and an eight-inch display with Apple CarPlay and Android Auto. A panoramic sunroof, while not available on the Sonata, continues as an option with the Elantra GT.
The GT is longer and wider than the previous generation, and Hyundai claims it has more interior space than the Civic, Cruze, Mazda3, Ford Focus, or Volkswagen Golf. Evanoff confirmed to IHS Markit that the Golf was the primary inspiration for the Elantra GT. The Elantra GT comes standard with the 162-hp 2.0-litre engine from the Sonata, while the new GT Sport takes the 201-hp 1.6-litre turbocharged engine from the Elantra Sport sedan. Both engines can be mated with a 6-speed manual transmission; the 2.0-litre can be ordered with an automatic transmission, while the 1.6-litre Sport has a 7-speed dual-clutch transmission (DCT). During a brief test drive by IHS Markit, the DCT was a better match for the 1.6-litre's powertrain profile. In terms of safety technology, the Elantra GT offers smart cruise control, automatic emergency braking with pedestrian detection, lane-keep assist, attention assist, high-beam assist, and blind-spot detection with rear cross-traffic alert.
Outlook and implications
Hyundai has had a difficult 2017 with sales down 10% in the year to date, and its car lines suffering at the same time as the industry has. The Sonata's facelift will have a difficult time maintaining sales against the all-new Toyota Camry and the Honda Accord, as holding ground is an increasingly difficult challenge in a difficult sedan market. The Elantra GT offers an opportunity to take advantage of increasing US acceptance of hatchbacks, and is a competitive alternative to the refreshed Honda Civic and Chevrolet Cruze hatchbacks. Sales of sedans are expected to continue to see difficult headwinds in the US, not helped by decreasing loyalty for the body type overall.
Hyundai's 2017 sales in the year to date are down by 10% compared with 2016, excluding the Genesis brand. Hyundai Motor America's vice-president of corporate and product planning, Michael O'Brien, said that the automaker's fleet sales are also down by 29.7% and retail sales are up 1.3%, although total sales are down. Despite the loss of market share for mid-size sedans, Hyundai (and other automakers) believe the segment is still worth serving. Hyundai states that the primary reasons for making a purchase are different between sedan and SUV buyers, with sedan buyers more likely to cite fuel economy, value, exterior design, and ride comfort as important purchase reasons than CUV buyers, whereas CUV buyers are more likely to cite safety features, all-wheel drive, and practicality of the vehicle as important purchase reasons. US sales of the Sonata were down nearly 27% year on year during January‒June 2017. Although Hyundai has not indicated how much of that decline may be related to a change in fleet sales strategy, the Sonata is seeing more significant sales declines than other sedans in the segment and it will be facing extremely tough competition from leaders the Toyota Camry and the Honda Accord in the coming months.
The Elantra GT offers an impressive amount of space and a strong feature content. According to IHS Markit registration data, the version accounted for about 10% of the Elantra's US registrations in 2016, or about 19,700 units, behind the target Golf, which had nearly 22,000 registrations in 2016. Excluding the hybrid Prius, the ageing Ford Focus (which will not be renewed until 2019) led US hatchback sales by more than double its nearest competitor. As the Focus is now the oldest model in the segment, and the segment is seeing more attention through new model launches, the Elantra GT may find improved sales opportunities with the latest, 2018 generation.
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The above article is from AutoIntelligence Daily by IHS Markit. AutoIntelligence Daily provides same-day analysis of automotive news, events and trends. Get a free trial.